Every customer wants to know the price of a project before work begins because everyone has a budget. The problem is neither you, nor your pool of bidding flush companies, have X-ray vision to ‘see’ how dirty your pipe system is. Even if one could see inside pipe, clean time is not linear and there are no formulas to calculate time onsite. Some buyers will still demand a firm fixed price and flush companies will often agree to get the purchase order. The problem is an enormous conflict of interest has been created and problems often arise. If an accepted proposal was created using an estimate of 5 days onsite, what happens if 12 flush days are really required to truly clean your lube oil system? Do you think the flush company will give you 7 days for free and automatically lose tens or hundreds of thousands of dollars?
NO. Unethical flush operators will show you particle counts and filter bags that appear to indicate cleanliness and their trucks will depart on day #5. Utilizing a fair daily rate is the best practice, but Owners need to implement it correctly. Ask for a firm fixed price for a fixed number of days and then require a daily rate IF a project extension is required to fully clean the systems. (Do not automatically award to the bidder with the shortest duration and likely the lowest price. Bidders often intentionally under-estimate the schedule to submit an artificially low price.)
Customers sometimes get upset that there is no warranty on flush services. We can only guarantee the system is ‘as clean as we say it is,’ when we leave. Note the previous statement did not say your system is clean, but rather it is ‘as clean as we can scientifically prove’ to the customer. This is because some clients terminate the cleaning process before it is complete to maintain an outage schedule, which is usually a bad decision. The real reason flush services cannot be guaranteed is because 99% of the time contamination is reintroduced by the customer. We call it Self-Contamination. Most often, the source of reintroduced dirt is one of the following.
Flush projects typically range from $50,000 to $5,000,000 and take 5 days to 1 year to complete. Below are some hints to reduce cost and duration while enhancing the probability of a high-quality outcome.
ALWAYS conduct a pre-bid site visit, unless your system had a catastrophic failure and you need someone onsite tomorrow. Bidders must know what they are getting into to give you the best price and a realistic schedule. Drawings do not provide the full picture. Responsible bidders will add contingency dollars to cover their unknowns. Unethical bidders may send a low price over the phone and then after winning the contract they camp out onsite later to extract as many dollars as possible.
Imagery will dramatically lower proposal prices. In contracting, a picture is not worth a 1,000 words, it is worth $10,000. So send plenty of pictures.
Do not worry exactly how a bidder arrived at the total price. Some contractors charge for pre-project engineering and equipment cleaning while others bury those costs elsewhere in the proposal. Suppose you need to hire an attorney and Lawyer A charges $300/hour and Lawyer B’s fee is $500/hour. Which is cheaper if A loses your case or B finishes in less than half the time? If there is a wide disparity between bidders’ estimated days onsite, then believe the companies with the longest duration.
Company A offers a price of $70,000 and Companies B, C, and D prices range from $100,000 to $130,000. The customer selects Company A, reasoning they have a 30% cushion before equaling the next lowest bidder. When Company A finally leaves your site, their final bill is well over $200,000. It happens all the time. If it looks to be too good to be true, someone may be intentionally under-estimating the duration to poach the contract.
Working 12-hour days instead of flushing continuously more than doubles the flush time and increases Customer costs. Maximum efficiency is achieved when the entire flush crew works to set up the flush circuit, then splitting in half on 12-hour shifts for continuous operations, and finally regrouping for equipment breakdown. If a contractor does not want to perform 24/7 operations, then they are probably understaffed.
To the greatest extent feasible the Customer should take care of supplying operating oil, LOTO, line breaks, generators, diesel, cranes, rigging, forklifts, scaffolding, waste disposal, site safety (SSHO), electrical hook-up, compressed air, custom machining and welding, supply of nuts, bolts and gaskets, temporary offices and toilets, and supply of electricity/water/gases/fuel. Flush companies can handle these non-core items, but they will mark up the cost by 15-25%, and because they do not commonly buy these services, they will overestimate cost to avoid losses. Plus, they will not have the relationships and buying power of the local Owner. A ‘turn-key’ price is convenient, but you pay a premium.
The Customer must decide on the finished result cleanliness standard before the project begins! This will determine the required equipment and flush times and reduce the likelihood of altered test results. There is a huge difference between ISO 19/17/15 and ISO 17/15/13 or whether it is a water turbine or a steam turbine. Call Turbine Cleaners if you need help…it’s free.
Airline tickets, rental cars, hotels, and trucking are very expensive, and are not profit centers for contractors. Adjust your project schedule to remove unnecessary trips. See if multiple flush circuits can run concurrently. Can part of the set-up crew be used to clean tanks while the remainder monitors the flush?
For the best prices, flush contracts need to be awarded a minimum of 4-6 weeks before mobilization. (Outage season is Spring and Fall and the best flush companies are booked months in advance.) If you need a company onsite next week, there will be an ‘emergency premium’ because another customer’s project was likely pushed back. If the flush company’s schedule is open, you probably picked the wrong company anyway. Additionally, if you delay a scheduled start, it means other opportunities were declined and crews are sitting around and still want to be paid. If the schedule needs to slide to the right, let us know as soon as possible.
Many mega-corporations dictate payment terms of 90 to 180 days. Flush contractors will have hundreds of thousands of dollars in expenses before your first check arrives. Do you really think they will wait 3-6 months for payment and not add 5-15% to their proposal?
When possible Owners should direct hire flush companies, rather than leaving it to Tier 1 General Contractors. First, prime contractors are incentivized to select low price over best quality. Second, Fortune 500 companies typically add a 20% to 40% margin. If you do not understand the difference between Mark-up and Margin, then take the flush cost and multiply by 1.25 to 1.67 and that will be the Customer’s final cost after the GC’s mark ups. Conglomerates claim to have small profits, but their overheads can be huge. Buy direct to save money and prioritize quality.
Small, under-staffed flush operators sometimes suggest that the Owner or prime contractor supply the manpower to set up and breakdown the flush equipment and offer a lower price in exchange. Unless the Customer has access to very high quality pipe fitters, mechanics and millwrights, this is usually a trap. Even the best tradesmen will take 50% to 100% longer to complete the work versus flush technicians who do this work every day. Remember these Customer-caused delays will increase the PO value at the daily rate. We frequently see our competitors send 2 people to a 5-person job and then blame the Customer when a change order is required.
Within 10 days of demobilizing, a reputable flush company will provide a detailed report including Before/After photos, Particle Counts, Daily Activity logs, Third-party lab test results if applicable, and project Lessons Learned.
Buyers hate T&M contracts because they are open checkbooks and more than likely they have been previously taken advantage of by greedy suppliers.
